Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1936 - SECT 139CD

             (1)  For the purposes of this Division:

                     (a)  a share in a company is a qualifying share if:

                              (i)  the 6 conditions below are satisfied; and

                             (ii)  in the case of a share that a taxpayer has acquired while engaged in foreign service--section 139CDA applies to the share; and

                     (b)  a right to acquire a share in a company is a qualifying right if:

                              (i)  the first, second, third, fifth and sixth of the 6 conditions below are satisfied; and

                             (ii)  in the case of a right that a taxpayer has acquired while engaged in foreign service--section 139CDA applies to the right.

Note 1:       Section 139DF excludes certain shares from being qualifying shares.

Note 2:       Foreign service is defined in section 139GBA.

             (2)  The first condition is that the share or right is acquired by a taxpayer under an employee share scheme.

             (3)  The second condition is that the company is the employer of the taxpayer or a holding company of the employer of the taxpayer.

             (4)  The third condition is that all the shares available for acquisition under the scheme are ordinary shares and all the rights available for acquisition under the scheme are rights to acquire ordinary shares.

             (5)  The fourth condition is that, at the time the share was acquired, at least 75% of the permanent employees of the employer were, or at some earlier time had been, entitled to acquire:

                     (a)  shares or rights under the scheme; or

                     (b)  shares or rights in the employer, or a holding company of the employer, under another employee share scheme.

             (6)  The fifth condition is that, immediately after the acquisition of the share or right, the taxpayer does not hold a legal or beneficial interest in more than 5% of the shares in the company.

             (7)  The sixth condition is that, immediately after the acquisition of the share or right, the taxpayer is not in a position to cast, or control the casting of, more than 5% of the maximum number of votes that might be cast at a general meeting of the company.

             (8)  The Commissioner may determine that the fourth condition (see subsection (5)) is taken to have been satisfied in relation to a share if the Commissioner considers that the employer has done everything reasonably practicable to ensure that the condition was satisfied.